India’s leading cab service provider Ola has confirmed reports of an internal inquiry against its human resources head and Chief Administrative Officer (CAO) Yugantar Saikia. He was allegedly indulging in corrupt practices against the company.

The corrupt practice

FactorDaily has reported that Saikia allegedly accepted clandestine payments in exchange for doling out preferential treatment to select recruitment vendors. This has resulted in a fraud estimated to be exceeding a few million dollars. As the company refused to reveal any further information, sources suggested that the fraud goes beyond human resourcing and involves multiple departments, including procurement, administration, and IT.

A source, quoted by the Economic Times, reported that the investigation had been going on since early January. Saikia was already serving his notice period and was to leave the company by the end of March. However, during the last week, his work assets were seized and he was asked to not report to work anymore. He will continue to be on the company payroll as the investigation, led by one of the ‘big four’ audit firms, continues.

A background to Saikia

Saikia had joined the company back in February 2015 as the head of human resources. He was given the additional charge of the CAO a few months later. He was a part of the senior management team and is said to have closely worked with Bhavish Agarwal, the co-founder of the company. During his three year stint, Ola experienced momentous growth and now has nearly 6,000 employees on its payroll. However, post this news, the hiring of as many as 1,000 employees is now under the scanner. Prior to joining the company, Saikia had served as a senior director at the Silicon Valley-headquartered analytics software company, FICO, and had also worked at the financial services firm, American Express.

Ola’s tainted past

It is not the first time that Ola has suffered on account of an employee’s unethical conduct. Last year, Unique Identification Authority of India (UIDAI) lodged an FIR against Abhinav Sharma, an Ola employee and the founder of Qarth Technologies (a company acquired by Ola). He was accused of data theft from the Aadhaar website without any authentication.

Other than this, A Sri Lankan company, Digital Mobility Solutions Lanka Limited, which also runs a cab-hailing service app called PickMe, filed a criminal action suit against Ola. It alleged that its subsidiary, ANI Technologies Lanka Limited, had indulged in a data theft by stealing confidential business and technical information developed by the former. Ola has also faced some other management and governance issues, including driver scams, driver protests and conflict with its majority investor, SoftBank, to name a few.

An untimely revelation

This potential fraud has been uncovered only a few days after Ola had raised $1.1 billion from Tencent, Softbank and the Ratan Tata backed UC-RNT fund. The company has also been pushing hard to expand internationally and has recently begun its operations in Australia.

As billions of dollars ride on the company, it is high time that it resolves such issues as expeditiously as possible. The company is in a desperate need of better and effective internal control mechanisms to avoid situations like these in the future.